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Residential building permits rise in March after record-low in Feb.

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The number of building permits for residential units issued in March throughout San Diego County was up significantly from both the prior month and the prior year.

The Construction Industry Research Board (CIRB) reported 524 total single- and multi-family units issued last month, almost three times the number issued in March 2008.

The 384 multi-family permits issued were more than 20 times the number of similar permits issued for January and February combined, while the 140 single-family unit permits were practically double those from February.

The increase is likely due to new home and resale activity picking up, as well as a change in policy in Chula Vista that allowed builders to defer their fees until they have a certificate of occupancy.

Typically, builders must pay their fees to the city before a permit is issued. But in Chula Vista, the builder can pay the fees after a new home is sold, rather than having to pony up the money ahead of time.

In Chula Vista, there were only two residential building permits issued in January and February combined. In March alone, the number of permits pulled increased to 26.

“The numbers are very small, but it is meaningful,” said Building Industry Association of San Diego CEO Borre Winckel.

“For the first time we see policy behavior, something [the BIA] encouraged and supported, result in actual permit activity and that’s what we’ve been talking to many, many cities about.”

While Chula Vista is the only city in the region to adopt the fee deferral program, Winckel said the BIA is working with other city governments to adopt a similar policy.

The increase in activity seen last month does not mean building will continue increasing as dramatically as it did from February to March

“The drama in the figures is not so much in the percentage increase, because the percentage increase does not tell the story …” Winckel said. “What we’re seeing for the first time is what we call the ‘spring bounce,’ which we hoped would happen and is happening.”

While the percentage changes in the number of permits is significant, they are still historically low. The 173 residential permits issued in February 2009 was a record low.

The spike in permits in March still leaves the total number of permits issued in the first quarter of 2009 lagging behind 2008 by 25 percent.

Winckel and other industry experts have predicted the number of permits issued in 2009 will be less than 2008 and continue to be soft through 2010.

The CIRB expects the number of residential building permits issued this year to be about 50,000; 22 percent less than the 55-year low 64,752 issued last year.


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